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Banking, Climate Change


#363
Return Of The Greenback

Published:

Nov 21, 2020


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Posted In:

Banking, Climate Change

Published:

Nov 21, 2020


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Looking down at Union Square from our headquarters in NYC, the climate doomsday clock is very hard to miss: 7041163645. That’s 7 years, 41 days, 16:36:45 hours until we must achieve zero emissions. Barely two months ago, we faced a stark reminder as smoke from the West Coast clouded the NY skyline (FTC Newsletter Sep 2020, Eye of Sauron).

Last week, the Fed announced it will seek to officially join the Network for Greening the Financial System (NGFS), a consortium of central bankers that banded together in 2017 to support the Paris Agreement climate goals and already includes nearly every major economy. This is a symbolic step forward by the world’s most important central bank, which lagged behind its peers on this issue.

The practical implications are still uncertain, however. It could mean climate stress tests for financial institutions, similar to the ones planned by the Bank of England. The Fed could also begin to embrace green bonds, akin to the European Central Bank, or require climate disclosures as a prerequisite for receiving Covid relief funds, like the Canadian central bank.

The move is not entirely surprising, as different regional Fed banks had already been highlighting climate risk. It isn’t exactly smooth sailing ahead either, as powerful lobbying groups behind the financial industry are ready to contest the climate risk limitations that President-elect Biden promises to introduce. But, if this comes to fruition, it’s pretty clear that the greenback has never been more deserving of its name.

Portfolio News


Ocrolus named #1 fastest-growing software company in New York on Deloitte’s 2020 Technology Fast 500™ - Congratulations to portfolio company Ocrolus on being named the #28 fastest-growing company on Deloitte’s Technology Fast 500 list and the #1 fastest-growing software company in New York. This announcement follows recognition this summer as the #1 fastest-growing fintech on the 2020 Inc. 5000 list. Read more

Oxio raises $12m in Series A funding to unbundle mobile telecom infrastructure - Congrats to portfolio company Oxio on their successful Series A funding round led by two of the top Latin American VCs, Atlantico Capital and monashees. The round also includes participation from prior investors, Multicoin Capital and FinTech Collective. Read more

Sigma Ratings wins 'Best Data Analysis Tool' award at 2020 Benzinga Global Fintech Awards - Congratulations to portfolio company Sigma Ratings for being named the overall 'Best Data Analysis Tool' at the sixth annual 2020 Benzinga Global Fintech Awards last week. Sigma was selected from thousands of global applicants as a finalist and ultimate category winner by the Benzinga team and participating judges. Read more

DirectBooks and Axoni launch communications platform for the primary issuance of corporate bonds - DirectBooks and Axoni announced that they have launched a core service to simplify and evolve the primary issuance process for corporate bonds. The service will be supported by 9 global banks, consisting of Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, and Wells Fargo. Read more

Return Of The Greenback


The U.S. wants to tame climate risk. Banks are ready to push back - U.S. financial regulators are gearing up to tackle climate change under President-elect Joe Biden. The industry will be ready to make sure any new rules suit them. Read more

Fed moves closer to joining global peers in climate-change fight - Fed Chair Jerome Powell on Thursday said the U.S. central bank had been working with the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), and had been attending meetings. “I think we are in the process of applying for membership there now,” he said. Read more

Biden will rejoin the Paris Climate Accord. Here’s what happens next - Upon rejoining, the U.S. will likely be expected to provide an updated climate target since the Obama administration’s goal and a plan to reduce domestic emissions from the power and energy sector. The U.S. is the world’s second largest emitter of greenhouse gases behind China, and is seen as key in the global effort to avoid the worst impacts of climate change. Read more

Industry News


Google Pay gets a major redesign with a new emphasis on personal finance - Google is also partnering with 11 banks to launch a new kind of bank account in 2021. Called Plex, these mobile-first bank accounts will have no monthly fees, overdraft charges or minimum balances. The banks will own the accounts but the Google Pay app will be the main conduit for managing these accounts. Read more

The cashless economy: How fintech is approaching the future of finance - Cashless payments were on the rise before the pandemic hit, and now, eight months into its grip on the U.S., their use is accelerating even faster. As these electronic payments and the services associated with them proliferate, particularly due to the pandemic and the incoming presidential administration, the financial world is changing rapidly. Read more

Affirm’s IPO filing reveals nearly a third of its revenue comes from a single customer - Peloton - Affirm reported a net revenue of $509.5m for the fiscal year that ended on June 30, 2020. That’s up nearly 93% from the same period in 2019. The company has also been getting its losses under control, with net losses falling from nearly $120.5m in fiscal year 2019 to around $112.6m during fiscal year 2020. Read more

CVS becomes first national retailer to offer support for PayPal and Venmo QR codes at checkout - The entire transaction can be touch-free, as it involves QR code scanning as opposed to using a card that has to be swiped or inserted into a terminal or numbers punched into a keypad. The new option arrives at a time when CVS says it’s seeing increased demand for contactless payments. Read more

Perella Weinberg set to go public via SPAC - PWP would be following other boutiques including Evercore, Greenhill, Lazard and, most recently, Moelis & Co in going public. Its listing plan comes as M&A activity has surged in recent weeks following a sharp slowdown earlier in the year because of uncertainty linked to the pandemic. Read more

SEC’s Clayton says payment inefficiencies are boosting bitcoin’s rise - Sounding more bullish on the cryptocurrency than he has in years, U.S. Securities and Exchange Commission Chairman Jay Clayton said Thursday the inefficiencies of modern payment systems are “driving the rise of bitcoin.” Read more

American Express links up With PayPal, Venmo to enable customers to split payments - The new program enables American Express consumer cardholders to use the new Amex Send & Split service. Cardholders will be able to send money to any PayPal or Venmo customer directly from the American Express App, and will also be able to split purchases and get paid back directly to their Amex cards. Read more

Santander buys Wirecard’s core European business for €100m - Some 500 employees will join Spain’s biggest bank, which is acquiring Wirecard’s European technology platform that processes electronic payments for merchants as well as its remaining credit card issuing business in Europe. Read more

The DOJ has approved Mastercard's acquisition of Finicity - If the path was closed due to regulatory concerns, fintech startups would have to either pursue earlier, smaller sales themselves, or wait for an eventual IPO. If that was the case, venture capitalists might shun putting as much capital to work in the sector. However, the Finicity approval makes it clear that not all fintech M&A worth $500m or more is going to encounter oversight headaches. That should be welcome news for late-stage fintech valuations. Read more

Nexi/payments sector: the principality of whales - Growth in online transactions has triggered a scramble for scale in a previously sleepy sector. There are plenty of smaller payment providers treading water as unloved divisions of struggling European banks, creating an opportunity for private equity buyers to execute mini roll-ups that could profitably be sold on to leviathans later. Read more

Uber plans return to financial services with hires “across the board” - Uber has broken its silence on financial services products just five months after it pressed the brakes on finance-related projects in favor of its ride and food delivery businesses. Now, it seems Uber is reigniting its focus on finance, with a particular emphasis on globally scalable financial products and Uber Cash integration. Read more

PNC Financial Services to buy U.S. arm of Spain’s BBVA for $11.6b - The deal, which would be one of the largest bank tie-ups since the financial crisis, would create the fifth-largest U.S. retail bank with more than $550b in assets, a giant in an industry that has been slow to consolidate. Read more

How the private equity industry stole a march in European payments - Just over a decade ago, processing electronic payments was largely regarded as a dull back-office function, including by the banks that did it. A deal this week to create one of Europe’s largest payments companies is a reminder of a group that took a very different view and stepped into reap the rewards: private equity firms. Read more

Artificial intelligence is reshaping finance - Last week Barclays’ credit card business struck a deal with Amazon to offer seamless customised shopping and payment services in Germany. The announcement drew little attention amid the US election, pandemic pain but Jes Staley, Barclays chief executive, said the deal has been one of the most important things to have happened to Barclays in the past five years. Read more

Nasdaq to buy financial fraud detection firm Verafin for $2.75b - Verafin, founded in 2003, provides more than 2,000 financial institutions in North America a cloud-based platform to help detect, investigate, and report money laundering and financial fraud. Read more

Regulator issues warning on hyped UK fintech Lanistar - The UK financial regulator this week accused the company of offering unauthorised financial services, even warning that it could be a scam. The Mirror newspaper headline last week billed it as 'World's most secure card' that will help tackle fraud that costs Brits £620m a year. Read more

Select Financings


Addepar - Mountain View based technology platform for wealth management raised $117m in Series E funding led by WestCap Group. Read more

Amicus.io - Charlotte based fintech startup aimed at “making philanthropy as easy as banking” raised $8.7m in Series B funding led by the FR Group. Read more

Cardless - San Francisco based consumer credit card startup raised $10m in funding from investors including Greycroft, Accomplice, Clocktower Ventures, and Pear. Read more

Chipper Cash - San Francisco based African cross-border payments startup raised $30m in Series B funding led by Ribbit Capital. Read more

Facio - Brazil based startup offering salary-advance services as well as online financial education raised $5m in Seed funding led by Monashees and ONEVC. Read more

Fireblocks - New York based platform that provides secure infrastructure for moving, storing and issuing digital assets raised $30m in Series B funding led by Paradigm. Read more

Griffin - London based banking-as-a-service provider raised $8.6m in Series A funding led by EQT Ventures. Read more

Harbr - London based enterprise data exchange startup raised $38.5m in Series A funding led by Dawn Capital and Tiger Global Management. Read more

Highwing - Denver based open data platform for insurance brokers and carriers raised $4m in Seed funding led by Baldwin Risk Partners and BrokerTech Ventures. Read more

Modulr - UK based payments-as-a-service provider raised £9m in growth funding led by PayPal Ventures. Read more

Northstar - San Francisco based startup that works with employers to offer financial wellness as a benefit raised $7.3m in Series A funding led by M13. Read more

Obligo - Israel based fintech company focused on security deposit alternatives raised $13.5m in new funding led by 10D. Read more

Paddle - London based billings, subscriptions and payments platform for enterprises raised $68m in Series C funding led by FTV Capital. Read more

Realync - Chicago based virtual leasing platform for multifamily real estate raised $22m in growth funding from Susquehanna Growth Equity. Read more

True Balance - South Korea based payments app for underbanked consumers in India raised $28m in Series D funding from SoftBank Ventures Asia, Naver, BonAngels, Daesung Private Equity, and Shinhan Capital. Read more

Trust & Will - San Diego based estate planning platform raised $15m in Series B funding led by Jackson Square Ventures. Read more

Turtlemint - India based insurance marketplace raised $30m in Series D funding led by GGV Capital. Read more


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